Betfair and The Stronach Group announced Feb. 18 that TVG will assume operations of HRTV, bringing together the two competitors that televise North American and some international horse races.
Under the deal, TVG will assume the operations of HRTV, which will be operated from the TVG Studio complex in Los Angeles, according to a release. The unified television operations will feature races from Santa Anita Park, Gulfstream Park, Pimlico Race Course, Laurel Park, and Golden Gate Fields over a seven-year period, as well as additional premium domestic and international racetracks.
According to the release, Betfair will make an initial payment of $25 million and estimates that it will pay further consideration totaling $47.8 million over the seven-year period, although the total is dependent upon TVG's future handle. Based on projected future cash flows, the present fair market value of these payments is estimated to be $56.3 million.
In the past 12 months, under previous agreements, TVG paid $4.3 million in television fees to HRTV related to television content, including The Stronach Group racetracks, for which HRTV has held exclusive rights. This transaction eliminates the need for TVG to pay those television fees.
Following the transaction, Betfair will own 100% of the equity in the unified television operation. The transaction does not include Xpressbet, the advance deposit wagering company owned by The Stronach Group.
The agreement paves the way for more than 5,000 additional races from U.S. tracks to be broadcast over the two networks. Via cable, satellite and telco distribution, TVG is currently available in 36.5 million U.S. homes and HRTV is available in 19.5 million U.S. homes.
"This is a very exciting step for TVG and HRTV as it enhances our ability to deliver premier horseracing content to our viewers, to show more races and to promote racing in the U.S.," said TVG's CEO Kip Levin in a statement. "With our recent investment in our new, state of-the-art HD studios now complete, we're pleased to expand our coverage of The Stronach Group tracks as part of a unified TV platform. This agreement is part of TVG's commitment to deliver the very best in U.S. racing, to generate incremental wagering on our advanced deposit wagering platform and, to drive additional advertising and distribution opportunities."
"Combining the significant investments we have made in our facilities and racing content with TVG's significant investments in television technology and distribution is the best way forward for ensuring a world class experience for all of our important customers and our fellow stakeholders in racing," said Alon Ossip, CEO of The Stronach Group.
The two networks will be able to show more live horse racing, the release said, adding that TVG telecasts approximately 27,000 races per year, and HRTV shows approximately 16,000, with significant overlap and many races on tape delay due to scheduling conflicts. TVG officials estimate that the two networks will be able to broadcast live approximately 40,000 races per year—over 5,000 additional new races than are shown today. The networks will merge operations over the next several weeks.